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This snafu could have long-lasting effects


It’s been a little over three weeks since Americans have started shopping for health insurance under the auspices of the Affordable Care Act. When launched on Oct.1, it was supposed to be an efficient marketplace for uninsured and self-employed Americans to shop for the insurance they are required to have under the new law.

To say it’s been a little rocky would be an understatement.

In a major blow to the Obama administration, has been an unmitigated disaster. The site has been basically inoperable for most who have tried to use it.

After the GOP was unsuccessful in defunding Obamacare by means of a government shutdown and national default, it has moved into public outrage over the technical debacle of Obamacare’s website. On Thursday, the federal contractors charged with building the site were hauled in front of Congress in order to answer for their incompetence.

The spokespeople for CGI Group (GIB), the lead contractor on the project, and Quality Software Services (owned by UnitedHealth Group (UNH) did not accept responsibility for the website’s failure, instead arguing that it was the government overseers at the Centers for Medicare and Medicaid who failed to ensure a complete “end to end” test run before the launch on Oct. 1. CGI has a particular interest in projecting competence, as its CEO told investors as recently as July that ballooning government contracts were the key to its future growth. (Read this for more on CGI.)

The other two contractors who testified escaped unscathed. Serco, a British company that is processing the paper applications, and Equifax, which is verifying the income of applicants, both reported no problems with their part of the project.

What Happens Next?

While CGI works around the clock to fix the website bugs, President Obama, his supporters, his opponents and many Americans are wondering how this will end.

Article printed from InvestorPlace Media,

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